LTB 533/18 £750 Pension Payments
18th September 2018
£750 Pension Payments
Under the terms of the pension deal struck as part of the Four Pillars Agreement, RMG and the CWU agreed the introduction of a £750 payment to members of the Royal Mail Pension Plan (RMPP) which they can use towards the cost of obtaining financial advice on retirement. This LTB sets out the criteria to qualify for this payment and how it will be paid in practice.
As Branches will be aware, our Agreement provided for the introduction of a new Collective Defined Contribution (CDC) pension scheme that will provide all members with a decent wage and security in retirement. But while we wait to secure final legal and parliamentary approval for our new CDC Scheme, transitional pension arrangements took effect from 1st April 2018.
As a result of all the recent pension changes and in view of the existing knowledge gap on pensions, the Four Pillars Agreement recognised that “employees’ pension arrangements and choices will become more complicated in future, particularly in relation to the Normal Retirement Age (NRA) 65 benefits payable on retirement from the RMPP”. Until the new CDC Scheme is introduced, transitional support arrangements have therefore been put in place.
Who qualifies for the £750 payment?
Those qualifying for the £750 payment will be members of the Royal Mail Pension Plan (RMPP) who take their NRA 65 benefits (actuarially reduced by 5% per annum if taken after 55 but before 65) and leave the company during the transitional period.
To be a member of the RMPP you must have joined Royal Mail and the pension scheme before 1 April 2008.
The £750 payment can be used by eligible employees towards the cost of obtaining financial advice on retirement.
How will the payment be made?
The pension administration team will liaise with the payroll team to confirm when the eligibility criteria has been met (i.e. an RMPP member is drawing their NRA 65 pension and leaving the business) and the £750 payment will be triggered and paid automatically.
The payment does not need to be claimed by the individual employee and will be made (after deduction of income tax and national insurance) directly into the individual’s bank account.
Royal Mail has confirmed their systems are now “live” so the 200 or so payments triggered to date will be processed and paid. Future payment runs will then be made on a monthly basis.
Any further enquiries in relation to the content of this LTB should be addressed to the DGS(P) Department.
Deputy General Secretary (Postal)
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